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Highway to Economic Growth? Competition in Public Works Tenders in the Democratic Republic of Congo
Author(s) -
Galletta Sergio,
Jametti Mario,
Redonda Agustin
Publication year - 2015
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/saje.12077
Subject(s) - call for bids , competition (biology) , public sector , democracy , economics , business , industrial organization , market economy , procurement , economy , political science , management , politics , ecology , law , biology
Abstract The D emocratic R epublic of C ongo ( DRC ) is one of the poorest countries in the world. The construction sector will play an essential part to bring the country on the path of economic growth, and competition within the sector is crucial to achieve this goal. In this paper, we analyse the effect of competition in public works tenders in the DRC , using a unique and newly assembled database on public works contracts. We find that the number of participating bidders significantly reduces contract prices, confirming our prior hypothesis that competitive pressure can enhance the overall performance of the sector. Further, we account for the possibility of heteregenous tender participants, finding that the competition effect can vary with the degree of bidders' heterogeneity.